Furlough scheme extended until the end of March 2021 and new support for businesses announced

    5 November 2020

    The Coronavirus Job Retention Scheme has been extended until 31 March 2021 as part of a new package of measures announced to support businesses, including an extension to mortgage payment holidays.

    The situation with Covid-19 is rapidly changing and this article will continue to be updated throughout. For the latest guidelines, please refer to gov.uk.

    The Coronavirus Job Retention Scheme has been extended until 31 March 2021, with furloughed employees to receive 80% of their current salary for hours not worked, as part of a new package of measures announced to support businesses, including an extension to the mortgage payment holiday for homeowners.

    Under the extended scheme, employers are not required to make a contribution to their employee’s wages for hours not worked. Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. According to gov.uk, this accounts for just 5% of total employment costs or £70 per employee per month for the average claim. The extension will be reviewed in January to “examine whether the economic circumstances are improving enough for employers to be asked to increase contributions”.

    The furlough scheme had initially been extended until 2 December, with employers required to make a contribution towards furloughed employees’ wages. The extended scheme is intended to provide support for businesses “long enough to help businesses recover and get back on their feet – as well as giving them the certainty they need in coming months” with evidence from the first lockdown showing that “the economic effects are much longer lasting for businesses than the duration of restrictions”.

    Employers will be able to claim for the extension using the existing online system.  All claims for periods from 1 July 2020 to 31 October 2020 must be submitted no later than 30 November 2020. Claims from 1 November 2020 must be submitted by 11.59pm 14 calendar days after the month you’re claiming for. If this time falls on the weekend then claims should be submitted on the next working day.

    Claim for furlough days in Claim must be submitted by
    November 2020 14 December 2020
    December 2020 14 January 2021
    January 2021 15 February 2021
    February 2021 15 March 2021
    March 2021 14 April 2021

     

    Chancellor of the Exchequer Rishi Sunak also announced that support for self-employed workers through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500. Other measures announced to support businesses both during and after the second national lockdown include:

    • cash grants of up to £3,000 per month for businesses which are closed, worth more than £1 billion every month
    • £1.1 billion is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly
    • plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans
    • an extension to the mortgage payment holiday for homeowners.

    “It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support,” said the Chancellor. “Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”

    This article is intended as a guide only. For more information, see gov.uk.

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